No logic in the merger: Patil

Maharashtra Finance Minister Jayant Patil today expressed surprise over the Reserve Bank of India's (RBI) decision to merge United Western Bank (UWB) with IDBI Bank. He said, "I fail to see any logic in merging UWB with an industrial and urban bank like IDBI."

Replying to a query, Patil further said, "Whether to register an objection to the RBI's proposal or explore legal recourse, if available, is a decision to be made by the UWB board and not by the state government."

The minister said, "The RBI is offering the shares of the bank at Rs 28, which is much higher than the price quoted on the BSE and the NSE, and this shows the bank had intrinsic capacity to revive itself and that's why we feel that the RBI should have accepted UWB board's proposal."

Moreover, he said, "Part responsibility of the bank's deteriorating financial health also goes to the RBI, as for the last three years the bank has been working under the chairmanship of its appointee."

Patil said whether Sicom's nominees on the UWB board will argue the case for challenging RBI's decision is the decision to be taken by the Sicom board, and the state government will not give any directions to them.

"We never had the intention of running a bank on a day-to-day basis, and that's why we had made a joint bid with organisations like HDFC and IDFC, and we had also given a commitment that we might even pull out of the bank once it stabilised," he said.

The state government's only concern was to protect the interests of depositors and retain the bank's Maharashtrian character, Patil added.